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Business Plan
INTRODUCTION
Traditionally, herbs and spices were used in a medicinal nature before being applied as a preservative for food and moreover, an additive to enhance the flavour of food. The trade of spices is an ancient activity encompassing countries from the Far East, India, Africa, modern southern Europe and the Middle East. It has even been the trade of currency in ancient times. In todays market, globalisation and immigration has lead to the introduction of international spices to local markets, increasing the complexity of dishes and enabling consumers to diversify their palette by trying dishes from around the world. Dishes that to some degree are very similar if not the same in flavour, to those found in host countries. Currently in Australia, only one dominant supplier of online herbs and spices exists. This business plan aims to detail the potential introduction of another online Australian spice distributor or more specifically, re-packer. Spice Kingdom.
The company will be a partnership comprising of three equal partners with considerable experience in diverse areas of business: Marc Hewitt Zhu Qiming Handan Tamay
There are no external proprietary rights that need consideration however recognition must be attributed to external sources from which photographs/images are used online or recipes sourced from other websites. Internal proprietary rights that should be considered primarily include intellectual property. Should a sales consultant or external consultant be contracted, a confidentiality agreement (especially with respect to import sources and pricing) will be actioned. The name Spice Kingdom is not currently registered on the Australian Business Name registry and is available for use. The domain name www.spicekingdom.com.au is not currently
registered and is also available for use. Anticipated launch date of Spice Kingdom is March 2012.
OBJECTIVES
The overall objective of Spice Kingdom can be framed within the mission statement: To be Australias first user-friendly online distribution channel for low cost, high quality herbs and spices, that embraces multiculturalism through its offer of authentic global flavour sensations through encouraging culinary experimentation and diversification. Spice Markets goal is to penetrate the industrial market by acquiring a 15% overall industrial market share in the Victorian dried herb and spice market (end user) by 2016 and to have established a strong presence in the minds of the consumer market at that time. Thereafter, the potential sale of the business to a larger company will be considered.
MARKET ANALYSIS
GENERAL OVERVIEW
The herb and spice market operates in the food and beverage market. Statistics for the dried spice market in Australia are lacking with most market information only relevant to the fresh herb market. The sources that are available present conflicting statistics on the dried herb and spice market. For example, Fletcher (1997) indicated that in Australia, the dried herb market was worth approximately A$80 million whereas Rubin & Fikke-Rubin (1998) found that the dried culinary herb market was worth closer to A$18million. More relevant research revealed that in 2008, the Asia Pacific Market was said to be worth A$1.4B www.rts-resource.com 2008. The global market for industrial seasonings, herbs & spices is currently worth A$5.9bn and is growing at a rate of 4.4% per year, according to the latest research from RTS. www.rts-resource.com (2008) In Asia Pacic, the market for industrial seasonings, herbs & spices grew to$1.4bn in 2008, with a yearon-year growth rate of 6.1% by value. www.rts-resource.com In 2008, total global usage of industrial seasonings, herbs & spices in food and drink stood at 1.5 million tonnes The largest markets by country are: USA 441,983 tonnes China 144,130 tonnes UK 99,550 tonnes Japan 96,574 tonnes www.rts-resource.com Although Australia is not listed in tht largest markets, usage in Asia Pacic was forecasted to grow by an additional 42,000 tonnes over the next ve years from 2008 to 2013. www.rts-resource.com The global market for seasonings, herbs and spices is expected to grow steadily at a rate of 2.1% per year, reaching $6.3bn by 2013. www.rts-resource.com In 1997, the average price of dried herbs ranged between $5 and $20 per kilo with some exceptions below and above this range (Fletcher, 1997). Vinng (2001) found that 99% of all dried herbs and spices are imported. The Australian Herb and Spice Industry Limited (AHSIA) oversees the herb and spice sector as prior to 2004, no official representation or industry organisation was present however their interests lie primarily in fortifying the fresh herb industry in Australia. A number of dried herb and spice repackers exist in Australia and more specifically, Victoria. Stronger competition is evident in New South Wales. Although few have endeavoured to penetrate the industrial market in Victoria with most opting for gourmet style cafes and continental delicatessens for their distribution channels. After conducting research engaging a variety of sources, it appears the general delivery requirements for repackers is 100kg and up with pricing varying from $2 to $10 per kilo. Most leafy herbs dry down at the ratio of 5kg fresh to 1kg dried.
. Every single restaurant in Melbourne utilises spices in their cooking, whether it is to add mild seasoning or to furnish the dish with fervent flavour.
The market for all dried herbs is not price sensitive and because a dried item can be stored and is less likely to be influenced by seasonality when compared to fresh produce, harvesting peaks and troughs tend to be smoothed out providing little opportunity for price hikes during times of shortage.
Wholesalers can be sourced from various B2B online avenues including (but not limited to): Alibaba (trade portal) Spice Market (trade portal) Importers.com (trade portal) The ten most popular herbs traded are as follows: HERB Parsley Coriander Dill Basil Mint Chives Rosemary Oregano Thyme Others NEED SOURCE Estimated % of total production 25 20 20 15 6 6 2 2 2 2
COMPETITOR ANALYSIS
Various competitors exist in the dried herb/spice re-packet market both in the physical (bricks and mortar) and online (clicks and mortar) realms and a combination of both of the above.
McCormicks & MasterFoods Strengths Strong brand names Strong distribution channels Established companies Strong and consistent suppliers Consistent flavour R&D investment Diversification of spice range Weaknesses Bureaucracy of larger organisation could lead to slower reaction time Packaging design enables moisture to enter into spice/herb jar Glass packaging can spoil entire spice if broken Mild intensity of flavours
Hoyts Strengths Intensity of flavour Moderate distribution channels Presence in larger supermarket chains Simple packaging Competitive pricing Moderate brand awareness Australian owned Weaknesses Strength of brand Slow turnover Need storage vessel for spices unless consumer wants to leave spice on package risking degradation of flavour Diversification of spice range No web presence
Four Leaves Strengths Intensity of flavour Presence in smaller retail outlets Simple and effective packaging Australian owned Good product awareness web site Weaknesses Higher pricing Slow turnover Poor distribution channels Diversification of spice range Cannot buy online
Home brand (self branded) Strengths Ability to position product line using in store discretion Ability to extend product line with moderate ease Strong brand awareness Corporate backing Strong supply chain Weaknesses Slow reaction time due to bureaucracy Diversification of spice range Packaging design enables moisture to enter into spice/herb jar Glass packaging can spoil entire spice if broken Poor flavour intensity
Intensity of flavour Strong positioning in industry and regulatory bodies Good web search presence Established web site Excellent spice range including native Australian spices Australian owned First mover Physical store presence
CAUSLEY FRESH www.causleyfresh.com.au Strengths Diverse range of products Australian focussed products Attractive web site Link to social media Weaknesses Mild collection of actual spices Redistributor of alternate brands Based in one locality Confusing target audience
http://www.oostraspice.com.au/index.html Weaknesses Strength of brand Investment capital Use of one supplier Excess information on website
Intensity of flavour Strong premium positioning in industry Market share competitors Reasonable spice range
http://herbsupplies.com.au/index.php Weaknesses Strength of brand Use of one supplier Web site navigation Premium prices
Intensity of flavour Moderate positioning in industry Excellent spice range Certified Organic spices
http://herbsupplies.com.au/index.php Weaknesses Strength of brand Use of one supplier Web site navigation Premium prices
Intensity of flavour Moderate positioning in industry Excellent spice range Certified Organic spices
ITEM 1: PRODUCT LIFE CYCLE AND CURRENT POSITIONING OF HERB AND SPICE MARKET IN AUSTRALIA
MARKETING STRATEGY
TARGET MARKET IDENTIFICATION
Customers who utilise spices can be divided into two groups being industry-based customers (both end users and retail/distribution) and residential customers.
INDUSTRY (RETAIL/DISTRIBUTION)
Delicatessens Modern/Contemporary Cafes point of sale and decorative Food supermarket chains Other distribution channels
RESIDENTIAL (CONSUMER)
Traditional cooks Experienced home cooks Experiential cooks First time cooks Young cooks
DEMOGRAPHIC SEGMENTATION
Hospitality
Hospitality
Hospitality
Hospitality Manufacturing
SIZE
Varied
Varied
Small to Medium
Small to Medium
Small to Medium
LOCATION
Basic
Basic to Moderate
Moderate to Advanced
Moderate to Advanced
Moderate to Advanced
OPERATING VARIABLES
Occasional to Often
Often to Always
Often to Always
Often to Always
Often to Always
CAPABILITIES
Mild to Moderate
Moderate to High
Moderate to High
Moderate to High
Moderate to High
PURCHASING APPROACHES
Source good quality at fair price Establish contracts with supply chain
Source excellent quality at reasonable price Establish contracts with supply chain
Source good quality at fair price Establish contracts with supply chain
Owner of business may have total control Some input from head chef/cook
Head chef empowered Responsible for reordering Limited consultation with owner/purchasing officer
Head chef empowered Responsible for reordering Limited consultation with owner/purchasing officer
Non existent to moderate relationship Spices may be acquired from numerous sources including supermarket chains
Moderate relationship May favour trusted brands Spices may be acquired from a few sources
Non existent to moderate relationship Spices may be acquired from numerous sources including supermarket chains
No official Policy
No official Policy May lean toward Australian suppliers May lean toward organic suppliers
No official Policy May lean toward Australian suppliers May lean toward organic suppliers
Accreditation required
Accreditation required May lean toward Australian suppliers May lean toward organic suppliers
CRITERIAPURCHASING
Price sensitivities Trusted supplier Consistency of flavour Quality of product On time delivery
Trusted supplier Consistency of flavour Intensity of flavour Quality of product Ability to present unique flavours On time delivery Urgent delivery
Trusted supplier Consistency of flavour Quality of product Ability to deliver quantities On time delivery Urgent delivery
Moderately Urgent
Urgent
Very Urgent
Very Urgent
Moderately Urgent
SITUATIONAL FACTORS
Small to Medium
Medium to Large
Medium to Large
Large
Medium
MARKET SEGMENTATION
CONSUMER SEGMENTATION
Traditional Family Cooks PSYCOGRAPHIC SEGMENTATION Cook for the immediate and potentially extended family for most of their lives Employ traditional recipes, often passed down from generations. May shop at the local butcher or IGA Are retired or semi retired May participate in some cultural based community cooking festivals. May want to be the best at what they cook. Do not use the internet to purchase items Experienced Family Cooks Chief cook for the family for most of their life Employ traditional recipes passed on from their mothers but may also occasionally try new recipes Shop at major food supermarket chains but may also shop occasionally at specialty stores Employed full time or part time Enjoy dining out and seeing the occasional movie May occasionally use the internet to purchase items Experiential Cooks Cook as an expression of creativity Have embraced cooking after gaining confidence Experiment with a vast array of cultural dishes May shop at Victorian/South Melbourne market, specialty Are employed full time Enjoy socialising with friends both physically and online Enjoy trying new dishes when dining out Occasionally use the internet to purchase items Occasional Cooks View cooking as a chore and try to reduce amount of time spent in the kitchen Want to learn how to cook but stick to basics Generally shop at larger supermarket chains Are employed full time, part time or are students Enjoy socialising with friends Are very tech savvy Often use the internet to purchase goods Young Cooks Are excited about cooking and experimenting with flavours Are eager to learn how to cook and are starting to master basic recipes Have minimal influence over source of produce May need parental supervision in the kitchen Are students Enjoy socialising with friends both physically and online Extremely the savvy Use the internet to purchase goods via phone
INTERESTS
ACTIVITIES
Family is of high importance and family dinners are values and encouraged. Responsible for most home duties. Highly interested in cooking and feels a sense of achievement through providing good food. Enjoy sharing recipe ideas with close friends. Avoid fast food View cooking as a personal achievement Watch television when not cooking
Family is of high importance but family dinners are not always eaten together Responsible for most home duties Moderately interested in cooking but may perceive it as a chore Occasionally share recipe ideas Content to put a nice hot meal on the table Consume fast food on a weekly basis View cooking somewhat as a chore Enjoy reading magazines and watching prime time television. Occasionally surf the internet
Family is of importance but due to lifestyle, only occasional family dinners are consumed together Dinners are often consumed in solace or with a partner Responsible for most home duties Extremely interested in cooking Occasionally share or post recipe ideas Consume fast food on a weekly basis View cooking as a personal achievement Often read newspapers and surf the net. Watch television to chill out and may have portable Internet device
Family is moderately significant but rarely do families dine together. Dinners are often consumed in solace or with a partner Responsible for most home duties although tend to neglect them Not really interested in cooking Do not share or post recipe ideas Consume fast food 2 3 times a week View cooking as a chore Heavy internet users owning portable internet devices
Family is of high importance Dinners are consumed together Responsible for some home duties Somewhat interested in cooking Would not often share or post recipe ideas Consume fast food on the weekend View cooking somewhat as a personal achievement Enjoy magazines and are heavy online users, most owning portable internet devices
Feel they are an integral part of the family support structure but will not openly demonstrate or acknowledge it. Society is getting worse and its not like the good old days. Feel the future is grim for their children and grandchildren Believe politicians cannot be trusted Traditional family roles should be upheld Education and continual employment is critical for success Like to use products that they are familiar with
Feel that they have done a good job raising their family Somewhat uncertain about changes in society Have been affiliated to a particular political party but are growing tired of broken promises Lean towards traditional family roles but starting to warm up to non traditional family roles Need to start planning for their retirement Position education as important Like to use familiar products but may be swayed to buy alternate if discounted or upsized
Commencing a family or entertaining thoughts of beginning a family Feel society needs a time out to recoup but not overly concerned about the future, what will be will be No overly strong political persuasions, may now also favour the Greens. Very liberal in thought Believe in non traditional family roles Feel that life long learning is important either in an educational institution, selfguided learning or DIY projects. Happy to experiment with different products and like unique products Pre-family (with their own households but no children) and/or Family (parents with at least one dependent child)
Not contemplating starting a family Excited about the future but uncertain of job prospects Very little interest shown in politics Are familiar with non traditional family roles Believe that education is critical and employers are becoming more demanding of higher qualifications Happy to experiment with different products and like unique products
Not contemplating starting a family Feel that non traditional family roles are the norm Lean towards environmental sustainable and organic Believe that education is vital Feel that the future is bright Happy to embrace multiculturalism products Heavily involved into baking and making simple recipes due to parental influence. Courageous in their use of spice and happy ot try new things.
OPINIONS
DEMOGRAPHICS
LIFESTYLE
Late (parents with children who have left home, or older childless couples) Empty nesters
Family (parents with at least one dependent child) and soon to be empty nesters
BEHAVIOURALISTIC SEGMENTATION
BENEFITS SOUGHT
USAGE RATE
Regular to heavy spice usage due to high involvement in cooking Use of 12 regular spices
Regular to heavy spice usage due to high involvement in cooking Use of 12+ regular spices
BUYREADINESS TO LOYALTYBRAND
New User
Unaware of online spices due to limited computer manipulation skills. Trust issues with online stores.
Some awareness of online spices Some trust concerns with internet buying
Some Interest in buying spices online Mostly confident of secure online purchases
Informed of online spices but not overly interested in purchasing Confident with online purchases
Some Interest in purchasing online spices but restricted due to age Confident with online purchasing
PURCHASE OCCASION
Regular Occasion
Positive
Positive
Enthusiastic
Indifferent
Positive
SWOT ANALYSIS
Strengths Herb production is labour intensive hence fresh herbs are likely to rise more than dried herbs which are often produced in areas where labour costs are lower People are often time poor and may not have the time to get fresh herbs Fresh herbs often dont last too long leaving a feeling the consumer with the potential of post purchase dissonance Not influenced by seasonality Creative and diverse management team Little consumer knowledge about home grown herb production, often resulting in poor yields. Weaknesses Unknown Do not offer fresh herbs Some of the intensity of flavour of herbs/spices can be lost in their dried form (Eg, coriander) Second player in the market Not all produce is sourced locally. Heavy reliance on international suppliers. Distribution is only within Australia Inexperienced with respect to direct involvement in spice industry
Opportunities Low number of players Penetrate industrial market Provide a real cost saving for consumers Become top of mind as an Australian spice distributor. Placing the word SPICE at the beginning of the brand name facilitates the identification of spices with Spice Kingdom Sponsor various culinary schools throughout Melbourne with the offer of free spices for individuals demonstrating excellent results.
Threats Increase in demand for fresh herbs Increase in demand for certified organic products Ease of international postage from global competitors attacking Australian market Unstable political conditions in many of the herb/spice supplying nations. More individuals growing their own herbs
POSITIONING MAP
STRONG FLAVOUR
SPICE KINGDOM
LOW PRICE
HIGH PRICE
MILD FLAVOUR
THE FOUR Ps
PRODUCT HERBS AND SPICES
Spice Kingdom aims to source dried herbs and spices from areas in which that herb or spice has its origin, in regions where it is well grown or in places where it is thoroughly used in cooking. For example curry powder will be sourced from India, baharat from the Middle East, five spice from China and even mountain pepper from Tasmania (Australia). This adds to the mystique of the spice and enables the consumer to feel that they are truly receiving an authentic product and one that could not be replicated from other sources. A potential trade portal for the importing of spices would be the AliBaba. However due to stringent import requirements, primarily customs regulations, international sources will only be considered once the business is established. This also minimises risk in shipping delays, political and social unrest in these countries along with a host of other factors. Therefore Spice Kingdom will initially use a local (national distributor) of spices before establishing its own international suppliers. The local suppliers that are currently under review include the following:
COMPANY NAME Spice Wholesalers Herb Wholesalers Segut & Watson The Spice Merchants Bas Foods ADDRESS None Supplied 9 Chiswick Place, Forest Lake QLD 4078 113 St David Street, Fitzroy VIC 3065 15 Burgay Court, Osbourne Park WA 6017 419 Victoria Street, Brunswick Vic, 3056 WEB SITE http://www.spicewholesalers.com.au /default.asp http://www.herbwholesalers.com None supplied www.thespicemerchants.com.au http://www.basfoods.com.au PHONE (07) 46 813 444 (07) 3879 1119 (03) 98304492 (08) 9204 4225 (03) 9381 1444
As consistency in high quality along with a guaranteed supply are critical success factors in achieving a point of difference in the market, due diligence is being undertaken to ensure a successful supplier partnership is achieved. Spice Kingdom will still utilise the sourcing strategy of acquiring dried herbs and spices from areas in which that herb or spice has its origin, in regions where it is well grown or in places where it is thoroughly used in cooking via local importers.
PACKAGING
Inspired by the Four Leaves packaging concept, the spices will be sold in various packaging sizes: 30 grams, 90 grams (see Appendix 2), 500 grams and kilogram bags. 15 gram packages A set of six 15gram packages will be available for purchase. The packaging will be the same as the 30gram packaging (see below) but will be half the dimensions. 30 gram packages Packaging for the 30gram packages will be simple utilising easy seal/reseal transparent plastic packaging (satchels) to maintain freshness. This also enables branding to be achieved on the front of the packaging via the label and provides a surface to list the ingredients of blended spices and suggested recipes. Dimensions of satchels will be approximately 100mm wide x 170mm tall for 30g satchels. The design of the packaging will be a derivative of the Four Leaves packaging. 90 gram packages Packaging for the 90gram packages will be utilise plastic reusable jars and will be a derivative of the Four Leaves packaging for 90gram jars. (See Appendix 2)
500 gram packages 500 gram bags will be primarily reserved for industry where higher quantities of cooking enable mass quantities to be moved. Kilogram bags Kilogram bags will be primarily reserved for industry where higher quantities of cooking enable mass quantities to be moved. Taster Packs It is important that any potential fears be alleviated when buying spices, that is, the fear that the customer will purchase a spice in a quantity that will not be utilised due to the spice not appealing to the customers taste. It is for this reason that taster packages will also be available, offering multiple spice packages of 15 gram packages. Examples of taster packages are listed below:
MEDITARRANEAN SAMPLER Thyme Oregano Sumac Nigella Cumin EAST ASIAN SAMPLER Chinese Five Spice Chinese Salt and Pepper Mix Sichuan Pepper Corns Star Anise Hot Mustard AFRICAN SAMPLER Allspice Clove Grains of Paradise Wild mango (Ogbono) Black Cardomom Spices will be free from preservatives, artificial colourings and additives.
PRICE
All spices would be priced very competitively at an average rate of 20% less than the major competitor, www.herbies.com.au. A skimming price strategy would be implemented to provide customers with an incentive to try the spices without incurring a substantial financial risk. Margins would be reduced for the first six months of operations in order to penetrate the market and gain a foothold in the market place. Should a 20% reduction be unrealistic to achieve a margin, incremental deductions will be made until both a margin is realised and that margin falls below the retail price of Herbies.
Discounts would be offered for bundled packages to allow customers to try before you buy. Discounts would be offered for commercial quantities and subject to ABN accreditation.
This strategy.
PLACE/DISTRIBUTION
Spice Market would initially be established using a residential property in the western suburbs of Melbourne to reduce initial overheads. Requirements for storage dictate that refrigeration is not required however refrigeration does enable the preservation of the intensity of the spices and this factor will be considered at a later date. At that time, light industrial areas would be investigated with suburbs close to freeway access given higher consideration. (See Appendix ???) It is important that customer delivery lead-time be no longer than three days with the provision of offering next day service if required. Australia Post and their associated express post service would be utilised for these options. Alternatively, same day service can also be offered within the Melbourne metropolitan region if minimum order quantities are realised. A courier company such as Toll would be engaged to utilise this facility and delivery costs absorbed by the customer. These delivery scenarios offer various selling points for the specified target markets. It enables time poor residential customers to fulfil their spice requirements quickly, especially when planning for a weekend dining event and also provides an avenue for Spice Market to promptly adhere to urgent industry requirements.
PROMOTION
Every spice that is sold in any quantity is accompanied by a recipe in which that spice can be used. These recipes would vary according to the type of spice being purchased. A library of at least 500 different recipes is required Sponsorship of William Angliss Trade School Sponsorship at the Worlds Shortest Lunch (supply of Spices to selected participants) Recipe ideas will be available online in geographic categories. These recipes will include a minimum of three or more spices that are on offer at Spice Kingdom. It is worthy to note that these recipes must contain spices that are not readily available at supermarket chains to entice the consumer to purchase the spice online through Spice Kingdom. Personal selling will be used heavily due to the tasting that is required to appreciate the spices. The personal selling allows the owners to engage in such activities, therefore reducing initial overheads. In order to reduce the possibility of post purchase dissonance, taster packages will be available that reflect key ingredients from multiple cuisines from around the world. For
example, an Indian taster set may comprise of six 15 gram spice bags of Gara Masala, Clove, All Spice, Turmeric, Coriander and Curry Powder. A Middle Eastern taster pack may include spices such as Cumin, Mixed Spice, Thyme, Paprika, Mild/Hot Chilli Flakes and Sumac.
SALES STRATEGY
SALES STRATEGY FLOW CHART
HT: Handan Tamay MH: Marc Hewitt QMZ: Qui Ming Zhu
HT to place cold call to prospective customer (utilising web based research) stressing no commitment
-ve RESPSONSE
Thank prospect and offer to send out taster pack. Ask to call back in 3 months and set approximate date. Thank prospect
Key details in CRM database. DO NOT WALK AWAY. HT to send out taster pack
+ve RESPSONSE
HT to undertake research on prospect focusing on menu. Email client spice list and ask to tick used spices and spices of interest. Establish recipe suggestions thereafter. QMz to undertake research on prospect focusing on actual business.
HT to package and provide taster pack and recipe folio to MH MH to revise findings and take taster pack and recipe portfolio to prospect meeting
QMZ to compile one page business report for MH based on industry segmentation
-ve RESPSONSE
+ve RESPSONSE
Leave prospective client with taster pack (no recipes). Ask to follow up in a few months.
MH to hand over introduction pack (including recipes), list of spices and related forms
The sales stategy will initially take a heavy face to face marketing campaign to attract industry. Meetings will be arranged with Melbournian restauranteurs. Demonstrate cost benefit of adopting spices with greater flavour.
DEVELOPMENT 3. Development
In this section, you will outline how you intend to ramp-up the business. This section is often under-developed in many business plans. Assuming you have a dynamic marketing plan and customers do indeed come flocking for the product or service, you must be able to deliver it to them. The Development section is a road map of how you are going to get from where you are now to where you want to be in the future. If you are starting a business, what are all of the steps that you need to accomplish to get the business up and running? If you are expanding a business, what do you need to do to make it expand? These steps can be as routine as securing retail space, or as critical as applying for and getting a patent on key technology.
Development Timetable
What is the timetable for launching the company and the products? (Consider adding a chart or table here) Go out as far into the future as you have plans.
Development Risks What are the risks to the successful implementation of the development plans? Are they technological risks (e.g. the product does not work, or a gas version fails intermittently)? Cost risks (e.g. costs are escalating)? Competitive risks (e.g. another company has beaten you to the market)?
3.2 Operations
The Operations section outlines how you will run the business and deliver value to the customers. Operations can be defined as the processes used to deliver the products and services to the marketplace, and can include manufacturing, transportation, logistics, travel, printing, consulting, after-sales service, and so on. In all likelihood, about 80% of the expenses will be for operations, and 80% of the employees will be working in operations and 80% of the managements time will be spent worrying about operating problems and opportunities. Be sure to link the design of the operations to the marketing plan. For example, if high quality will be one of the comparative advantages in the marketplace, then design the operations so that they deliver high quality, and not low costs. Remember that you will probably have to make trade-offs with the operations. It is impossible to have the lowest costs, highest quality, best on-time performance, and most flexibility in the industry all at the same time. Often, higher quality means higher costs, lower costs means less variety and less flexibility. Be careful how you make these trade-offs so that you can deliver products to the market in accordance with the marketing plan! PACKAGING TRANSPORTATION & LOGISITCS PRINTING AFTER SALES SERVICE
DEVELOPMENT
CURRENT STATUS ACTION Register business name Register business domain Establish Spice Kingdom bank accounts STATUS In progress In progress In progress
Application for food control certificate Appointment of solicitor and accountant Secure two different suppliers of each herb/spice to be offered via AliBaba trade portal. Spice Masters (a local importer) may be used as an alternative channel reducing the implications of heavy Australian importing regulations. Seek out insurance requirements Packaging options to be explored in greater depth and packaging company to be finalised Packaging design to be finalised DEVELOPMENT Go Live! Commence immediate promotional marketing concepts Extend recipe collection Extend website to facilitate promotional concepts Research and roll out extended marketing concepts Conduct cost benefit and market analysis of potential expansion into other states Solidify distribution channels in proposed expansion states Expand operation in two states Roll out marketing development plans in the targeted states as per Victorian operation
T.B.C September, 2011 T.B.C November, 2011 TBC September 2011 Q3 F12 Q3 F12 Q4 F12 Q4 F12 Q1 F13 Q2 F13 Q3 F13 Q4 F13 Q1 F14
MANAGEMENT
THE MANAGEMENT TEAM
The management team comprises of three equal partners, each assuming varied roles within the organisation. However in the absence of a written agreement, all partners will: - share profits equally; - cover losses equally; and - take equal responsibility for the business's activities and trading.
QI MING ZHU
Qi Ming Zhu holds a degree in international Business and a graduate diploma in Business IT/Commerce. He is scheduled to complete his Masters of Business IT/Commerce in 2011. Qi Ming has extensive experience in web design and e-commerce engaging in a variety of selfdriven e-trade activities both in Australia and mainland China. He is bilingual in Mandarin and English.
Qi Ming has outstanding IT literacy and has built numerous websites for e-commerce practitioners which has further enhanced his strong problem solving abilities. His intricate knowledge of web design and associated technological awareness provides Spice Kingdom with a strong IT function in which to foster the growth of the business, Qi Mings key responsibilities incllude: IT Management Website Maintenenance Research & Design Management Although the strengths of each partner have been utilised to foster effective capabilities, each partner will have the opportunity to contribute to alternate areas to which they are not directly responsible for. These areas include: Reaseach Online Development Promotional Development Lead Generation Development Other tasks as required
COMPANY STRUCTURE
Kevin Partner
KEY RESPONSIBILLITITES IT Management & Website Maintenance Research & Design Management
SHARED RESPONSIBILITIES Research Online Development Promotional Development Lead Generation Development Support of other functions as required
REFERENCES
Rubin, H & Fikke-Rubin, E, 1998, An Introduction to Herb Growing: A report for the Rural Industries Research and Development Corporation, Publication no. 98/76, Project No., AMR-7A viewed 2 May 2011 from https://rirdc.infoservices.com.au Fletcher, K, 1997, The Australian New Crops Newsletter, Issue 7, January 1997 downloaded from https://rirdc.infoservices.com.au Vinning, G, 1991,Culinary Herbs - A Market Assessment: A report for the Rural Industries Research and Development Corporation, Publication no. 01/167, Project No., HFA-3A downloaded from https://rirdc.infoservices.com.au
APPENDICES
APPENDIX 1
SPICE Allspice Basil (Sweet) Bay Leaves Caraway Celery Chervil Chive Coriander ORIGIN Central America, Mexico and West Indies India, Iran, Africa Countries bordering the Mediterranean Europe Europe, Africa Russia and Western Asia Northern Europe Africa, Europe MAJOR AREAS Jamaica, Honduras, Guatemala, Leeward Islands Belgium, France, Bulgaria, Hungary, Italy, India, Poland, Spain, USA Cyprus, France, Greece, Italy, Israel, Morocco, Portugal, Spain, Turkey, Former Republic of Yugoslavia Netherlands, Bulgaria, Canada, Germany, India, Morocco, Poland, Romania, Russia, Syria, UK, USA France, Hungary, India, Japan, Netherlands, UK and USA France, Italy, Russia, Spain, UK and USA Austria, Canada, France, Germany, Italy, Netherlands, Switzerland, UK and USA Argentina, Bulgaria, China, France, India, Italy, Morocco, Mexico, Netherlands, Romania, Russia, Spain, Turkey, UK USA, Former Republic of Yugoslavia Canada, Denmark, Egypt, Germany, Hungary, India, Netherlands, Mexico, Pakistan, Romania, UK and USA Bulgaria, China, Denmark, Egypt, France, Germany, India, Italy, Japan, Morocco, Netherlands, Romania, Russia, Syria, UK and USA Algeria, Argentina, Cyprus, Egypt, France, Germany, Greece, India, Italy, Lebanon, Morocco, Portugal, Spain, USA, Former Republic of Yugoslavia Europe, Africa, Near East and USA France, Germany, Grenada, Hungary, Italy, Morocco, Portugal, Spain, South America, Tunisia, UK and USA Argentina, Australia, Brazil, France, Germany, India, Italy, Japan, Taiwan, Former Republic of Yugoslavia, UK and USA Germany, Japan, Netherlands, Russia Albania, France, Greece, Italy, Mexico, Spain, Turkey, Forme:r Republic of Yugoslavia Algeria, California, Louisiana, Belgium, Canada, France, Germany, Greece, Italy, Japan, Lebanon, Netherlands, Portugal, Spain, Turkey, UK Algeria, France, Germany, Italy, Morocco, Portugal, Romania, Russia, Spain, Tunisia, Turkey, Former Republic of Yugoslavia, UK and USA Albania, Cyprus, Dalmatian Islands, Canada, Southern France, Italy, Portugal, Spain, Turkey, Former Republic of Yugoslavia, UK and USA Russia, France and USA Bulgaria, Canada, France, Germany, Greece, Italy, Morocco, Portugal Russia, Spain, Tunisia, Turkey, UK and USA
Dill Fennel
Fenugreek Leek Marjoram Mint (Peppermint) Mint (Spearmint) Oregano Parsley Rosemary Sage Tarragon Thyme
Europe and West Asia Mediterranean Region Saudi Arabia and Western Asia England and UK Greece, Italy, Spain Sardinia Europe Albania and Greece Russia China and East Indies
SOURCE: Peter, K.V. (2004). Handbook of Herbs and Spices, Volume 2.. Woodhead Publishing
APPENDIX 2
McCormicks Flavour Forecast 2011 top 5 flavour pairings are: 1. 2. 3. 4. 5. Butter Beans & Oregano Coconut & Chives Fennel & Coriander Hazelnut & Cinnamon Tomato & Tumeric
SOURCE: http://www.mccormick.com.au/resources/herbs-and-spices-101/flavour-forecast.aspx
SOURCE: Four Leaves (http://www.fourleaves.com.au/index.php? option=com_content&view=article&id=78&Itemid=27) Include map of web site Agreement form
APPENDIX 3
FUTURE FACTORY EXPANISON CONSIDERATIONS INTO LIGHT INDUSTRIAL AREAS (no particular order) 1. 2. 3. 4. 5. Brooklyn Collingwood North Melbourne Seddon Brunswick
RESTAURANT Jacques Reymond Alluvial Comme Kitchen Esposito @ Toofeys Flower Drum Mezzo Bar and Grill No35 Taxi Dining Room The Press Club C'est Bon (VIC) Lord Cardigan Restaurant Pearl Attica 3 Station Pier Araliya Bluestone Restaurant Bar Bottega Restaurant Campari House Church Street Enoteca Curry Vault Indian Restaurant & Bar
CUISINE Degustation, French, Modern Australian Modern Australian Modern French Italian, Seafood Chinese Italian Modern Australian Japanese, Modern Australian Greek, Modern European French Modern Australian Modern Australian Modern European Modern Australian, Modern European Sri Lankan European, Modern Australian Italian Italian Italian, Modern European Indian
AREA Prahran CBD CBD Carlton CBD CBD CBD CBD CBD Port Melbourne Albert Park Richmond Ripponlea Port Melbourne Hawthorn CBD CBD CBD Richmond CBD